Interesting observations on housing in Singapore

With the recent 20-40% rise in property prices following gains in stock market. There are a few interesting observations which seems to highlight possible money generating schemes. An estimate 100% profit is being suggested here.

Increase in housing prices, especially in public housing with higher COVs and HDB's new estimated land prices. Who will stand to gain from the increase?

1) Stamp fee will be payable to Inland Revenue Authority of Singapore (IRAS). For properties above S$360,000, stamp fee payable will be 3% of the purchase price minus S$5,400.).
2) Bank loan, with higher loan, longer period and possible increase in SIBOR rates - more interests to be paid out as local banks can collectively raise their rates.
3) Legal fees - conveyancing transactions, disbursements, solicitors' fees (sometimes peg to % depending on law firms); Lawyers and law firms make $, and pay respective taxes.
4) Higher annual property tax from increased valuations from IRAS.

I bet the budget next year will be showing signs of overspilling coffers. Despite the $20 billion estimate spending in the recession, I guess as usual our effective government will find ways to make it back (from old studies of for-the-poor GST, to ERPs, COEs etc).

I do think we are in the verge of an absolute recovery...that is if this is actually sustainable. A newly met acquaintance broke it down for me how it might actually be possible. Newly weds have parents with life-savings to loan or give cash for deposits or partial payment of the houses (so if you think about it, their old parents' $90k cheap HDB is effectively used to pay for their children's' current purchases as well). Apparently a couple wanted to purchase a flat from their parents at the cost price which is $190k below valuation, HDB disapproved it. Since there are laws preventing hand-me-downs, effectively the couple has to purchase at valuation with the above mentioned four observations of gains. Also with the recent rise in equities have resulted in 100-200% reap in profit for many who have bought into this incredible run since March 2009 which will pay easily for 10-20% of the housing price. Let's just pray all this is sustainable, otherwise many might end up in great debt.

Petrol prices?

On my last post on profiteering on petrol prices, recently it seems to be creeping up again. But is there a reason why, besides the USD weakening, is there a need to increase the price? Since Singapore Dollar is strengthening, is there really a need to raise pump prices given that it should par off? Looks like they will use hedging as an excuse.

The amount of crude oil left in the ground was 1.258trn barrels last year and at today's rate of use however there is still enough oil to last the next 42 years. As we embrace more green technology, will we be able to extend it? Highly likely.

I remembered when I was studying back in the eighties, it was rumoured that oil will run out by 2000. Today we are in 2009 and there is still an estimated 42 years remaining supply. Reason is due to the more reserves exploration revealing new sites as well as newer drilling technologies which allows more deeper extractions.
I reckon we will have more good years to be petrol heads and lemme burn some rubber tomorrow!

A little observation of profiteering

Have you noticed how our petrol, fuel, gases, transport provider hardly seem to drop prices even though we have eased off from the highs of USD$147/barrel to today's USD$100/barrel? That's about 30% drop in Brent Crude oil prices.

SIA just announced cutting fuel surcharge for short range flights, while coincidentally our Airports decides to raise departure taxes.

From Jan 1, departure taxes will go up $7 from $21 now - $15 airport tax and $6 security charge - travellers leaving from Changi Airport's main terminals will pay $28. And at Budget Terminal, the tax will go up from $13 to $15. Flying out of Seletar will cost $18, up from $16 now.

Somehow it all seems so familiar like government's usual pre-election freebies with post-election tax increases. "Give and take"


Stolen from PetrolWatch website

Anyhow, the main observation here is that our pump prices which peaked at S$2.36 in July for Grade 98 (excluding all credit card discounts, etc) and right now since early Aug, we have been stuck at S$2.07. That's only a 12% reduction?!! Is there a conspiracy or oligopolists are at play? These collusive actions are not checked by our government?

We are observing record revenues for oil companies, and people have to be suffering from such explicit collusion of price fixing. From higher fuel costs, fuel surcharges, food costs from transportation costs increases, I wonder if governments are in arms with these companies as they clearly have no qualms in bringing down the prices to reflect actual crude prices and bring down inflation.

Terminator Salvation

It has been a salvation no longer needing to work in the east after over 6 years of working in that area though I have changed companies 3 times! But with the ERP popping all over town, I am "enjoying" taking public transport after such a long absence. Seriously to entice people to take more public transport, the gahmen better buck up. To take over 1hr to get to a location which I take 1/5 of the time to drive there and find parking, its seriously time wasting. I can't wait for the Circle line to start, as a station will be just outside my place as well as the future Thomson line.

Anyway here's a sneak of the upcoming Terminator Salvation - Christian Bale is getting all the good shows lately...

Bite the bullet

So with the rising costs around us, the government has repeatedly ask companies to pay one time inflation packages to help citizens offset their increasing expenses. Yet today - Finance Minister T Shanmugaratnam warns S'pore may face 2nd round of inflation if workers' pay is raised. More pay is not the answer!

Seriously, if more pay is not the answer, perhaps a reduction in GST, or ERP or even the waiving of fuel surcharges would help.

I do not understand the policies our government is undertaking, be it monetary or fiscal. The conventional anti-inflation strategy would be to tighten demand by cutting government spending or raising taxes. But this would drain income from an economy already suffering from higher oil prices. The result would have been a sharp rise in unemployment. And if government was to chose to counter the loss of income caused by the rising oil prices, they would have have to increase spending or cut taxes. Since neither policy could increase the supply of oil or food, boosting demand without changing supply would merely mean higher prices, which is what we are observing right now.

First of all our government is increasing spending on projects such as F1, new sports stadium for the Youth Olympics, IRs, saving foreign banks from collapsing; followed by raising taxes and withholding subsidies. So the strategy employed is totally unconventional, and confusing because we have to deal with higher goods' prices, higher taxes and competing with government projects for the limited resources (for example: its harder and more expensive now to get electricians or plumbers, skilled trades which are earning more from the extensive construction boom). Which basically means - we are screwed. No increase in pay, and paying for things which are going to be priced way above the means of the poor.

In my previous post, many countries have either stopped projects or increased subsidies to enable their citizens to cope with increasing living costs.

I am just wondering how Singapore would fare in the coming months. And I hope our Finance Minister has more up his sleeves besides telling the people to bite the bullet or source for alternatives - cheaper fuel, cheaper housebrands..my suggestion would be a cheaper government. A 20% reduction in the entire cabinet and MPs' salaries, allowances and expenses can go a long way. Or maybe hold a retrenchment exercise like my company and let go of stagnated or ill-performing labour in their ministries, especially those Superscale salaried officers.

How the world curbs inflation

Well with a one week reprieve of more cheap petrol from the north, our neighborly Malaysians will be introducing a ban on foreign vehicles from purchase of subsidised petrol. This is an effort to allow the Malaysian government to still continue to subsidise their citizens with cheaper fuel.

Vietnam introduces 16 measures to curb inflation while ensuring growth.
The government basically will suspend stagnated projects as well as imposing serious fines on any individual or organisation speculating and causing essential goods’ prices to rise, these are from directives from Prime Minister Nguyen Tan Dung. He has in early April, ordered a halt to increased commodity prices until the end of June, a move aimed at cooling inflation which shocked many at 11.6 percent in the first quarter of 2008. Food cost registered the highest rise with 22.19 percent in May. Fuel subsidises were starting to stress on government spending which might lead to a widening in fiscal deficit.

India has imposed the export duty of 5-15% on steel and rice. The state government has waived off cess charged by the market committees on all the transactions of farm produce, which include grains, fruits, vegetables, edible oil etc.

The Chinese President Hu Jintao has vowed "forceful measures" to curb rising food prices and address a booming real estate market to curb rising housing prices to help low-income families and to provide them with better health care benefits. The central government has made arrangements to speed up the low-rent housing system, improve the affordable housing system and ease the housing difficulties of urban low-income families.

And you might wonder how the Middle Eastern countries whom are making tons of money from US$135/barrel of oil, deal with the rising inflation. The Saudi Kingdom gives sufficient welfare to their people by reducing tariffs on food items such as frozen poultry, dairy products, and vegetable oils from 20 to 5 percent. The Saudi Government has also decreased levies on building materials and has introduced subsidies and welfare payments.

Hmm now I wonder how my wonderful rich bought-Shin Corp-UBS-Citigroup-Westin Tokyo-Taiwan Bowa Commercial Bank-I give up-read here on their purchases-I wonder where they get their $$ from-government will be dishing out welfare or subsidies to the citizens. Oh wait.. our MM recently mentioned "Subsidies will not solve Singapore's problems"

MM Lee says giving subsidies will not solve Singapore's problems
By S Ramesh, Channel NewsAsia Posted: 25 May 2008 2021 hrs


SINGAPORE: Singapore's problems cannot be solved by giving subsidies, but by having a dynamic economy, said Minister Mentor Lee Kuan Yew.

Speaking at the Tanjong Pagar Day celebrations at the Queenstown Stadium on Sunday, Mr Lee drew lessons for Singapore from how countries in the region are tackling their problems.

The world has moved into years of high prices for food and oil, said Mr Lee. But Singapore does not have agriculture, so people have to earn enough money by working hard and smart to pay market prices for food.

He made it clear that Singapore cannot go the way of welfare systems in Europe, which have lowered incentives to strive and excel.

The minister mentor said: "I read many letters in the press urging subsidies for all manner of things – seat belts for school buses, food for the poor, medical fees and so on. Singapore must remain a competitive society to generate growth year after year.

"The government must ensure that everyone has the highest paid job he is qualified to do. If his salary is below the minimum for a decent life, the government will top up with Workfare. When everybody knows the cost of what he consumes or uses, he will spend his money more to his benefit."

Mr Lee noted that countries in the region have taken different approaches to worldwide problems.

His call to Singaporeans is to be grateful that the nation has long-term stability, continuing high-value investments and good growth. Mr Lee said he is confident that in five years, Singapore will be a more lively and beautiful city.

I think I prefer calls to readjust travel routes, buying cheaper house brand foods, and probably eat more $1.50 chicken rice; than telling me to be grateful to excessive fees, taxes, monopolized profits of GLCs, and purchases of "long term" screw ups investments. Seriously would you as a Singaporean prefer a lively, beautiful city littered with homeless, can/cardboard picking old folks? Surely we can do more for them or do we need to hold charity shows akin to those for overseas calamity aid funds to raise awareness for our own citizens?

Medical expenses - thank God I am employed! Part 1

Well a follow up to my fractured finger led me to more revelation on how lowly paid I am, and it's silly to pay to $ for silly fractures if you are unemployed and earn less than $20/hr.

Seriously I did not know private healthcare is so expensive. Luckily I am employed and have excellent medical coverage paid by my company. My bill came up to $388, out of which I detected $10 overcharging, and bargained away another set of inflammatory medication which was charged to me over 300% the selling price to doctors. I refused to pay that (strange b'cos I get full coverage, but the frugal side of me just think its absolute daylight robbery) and also because I still have some at home, so cutting the bill down to $315 of which $200 was for the 10 mins of consultation to tell me repeatedly "don't worry, you will get better" and that I am now suffering from volar plate tear injury.
Anyway how I know I was overcharged is because I used to date a medical sales rep. And what I am about to reveal here will soon allow you to understand why healthcare is so expensive in Singapore. So stay tuned.

Oh yeah and I was prescribed some cheap Thailand shit (which costs under about $0.67 each) and I get billed $1/pill for don't know what reasons I should be taking it for. Because I used to take the set of inflammatory medicine without this cheap Thailand shit which the doctor now prescribed and the receptionist over the counter said it is a must to prevent my tummy from going bad...duh..I think I just got conned.

Anyway the medication is called Xanidine and it is supposedly used for treatment of duodenal and gastric ulcer, oesophageal reflux, Zollinger-Ellison syndrome. Ok so why am I taking it? Damn, I hear someone shouting idiot in the background.

Gotta head out soon, so return for more of Part 2. With pictures and update on my freaking finger fracture and more inside news of medical care in Singapore.

Singaporeans embrace, while New Yorkers screw...

...the ERP.

As Monday came, 5 of the upcoming 16 gantries were turned on. The new ERP gantries at Upper Bukit Timah Road, Upper Boon Keng Road, Geylang Bahru, Toa Payoh and Kallang Bahru began their money collecting duties, as Singaporeans have to deal with the added woes espcially at Toa Payoh. Businesses at the heartland will have to deal with the expected drop in traffic amidst the global rising cost of commodities, and the impending credit crunch -aka recession. This is just one of nicely timed addition/plus "+" sign in our daily costs, inflation, CPI index that our government policies has chosen to add on to and expect us, the prosperous repressed citizens to embrace.

This term "prosperous repressed citizens" was introduced to me while I was reading an English translated edition of the local papers on board a Japanese airline. It was in brief summary with relation to our Singapore elections 2 terms back - maybe the translation sucked, they probably used some online translator service, actual term is probably subdued, cowed, submissive, passive, subservient, meek, docile, compliant, obedient. (Strangly, it seems easier to find alternative words for repress than suck)

Anyway, for those who do not know what is the use of these electronic road pricing (ERP) “checkpoints-aka gantries”, they are the government's "creative" efforts to keep Singapore's roads moving smoothly. This creative method is like most "whine and fine" schemes we have, they deduct a certain amount of $ as the vehicles passes through these checkpoints. It is mandatory for all vehicles in Singapore to be fitted with Identification Units (IUs).

So come November, we would have a total of 71 gantries performing their money deducting functions on pitiful road users (having to deal already with the world's 3rd priciest petrol - drivers, please check out this interesting post by Static Variable, I bet you would be fuming after reading it).

In other noteworthy news, my sister who is working in New York but unfortunately not driving, has democratic neighbors who gave a huge thumbs finger UP to the planned congestion pricing fee. The reason cited was that plan was flawed as the underfunded mass transit would not be able to cope with an increase in commuters. Well Singaporeans probably do not have to worry about the public service being underfunded! They will just simply passed on the costs to the commuters, even as we try to minimise service disruptions and suicides.